GrowGeneration (GRWG) turns Q2 2026 Adjusted EBITDA positive and lifts outlook
Rhea-AI Filing Summary
GrowGeneration Corp. reported second quarter 2026 net sales of $43.2 million, up 5.5% year-over-year and marking a third consecutive quarter of revenue growth, led by its commercial B2B business. Cultivation and Gardening net sales were $34.9 million and Storage Solutions net sales were $8.3 million.
Proprietary brand sales reached 39.7% of Cultivation and Gardening revenue, up from 32.0%, helping lift gross profit to $12.3 million and gross margin to 28.5%. Total operating expenses fell 13.1% to $14.7 million, driven by a 21.9% reduction in store and other operating expenses from footprint rationalization and cost initiatives.
GAAP net loss narrowed to $2.0 million from $4.8 million, while Adjusted EBITDA turned positive at $0.3 million, a $1.6 million improvement. The company ended June 30, 2026 with $41.0 million in cash, cash equivalents, and marketable securities and no debt. For full year 2026, GrowGeneration reaffirmed revenue guidance of $162–$168 million and raised Adjusted EBITDA guidance to $2–$3 million, expecting profitability to build with stronger third and fourth quarters.
Positive
- Net loss improved by $2.8 million year-over-year, narrowing to $2.0 million in Q2 2026 from $4.8 million, reflecting higher revenue and lower operating expenses.
- Adjusted EBITDA swung from a $1.3 million loss to a $0.3 million gain year-over-year in Q2 2026, indicating meaningful progress toward profitability.
- Strong liquidity with $41.0 million in cash, cash equivalents, and marketable securities and no debt at June 30, 2026 supports ongoing operations and strategic initiatives.
- Full-year 2026 Adjusted EBITDA guidance increased to $2–$3 million, signaling management’s expectation of continued margin and earnings improvement.
Negative
- None.
Filing Explained
Positive Adjusted EBITDA is a non-GAAP operating measure, not GAAP net income or operating cash flow.
A Form 8-K reports specified material events; here, the company furnished its second-quarter results and updated 2026 guidance through Exhibit 99.1, expressly stating the release is not filed under Section 18.
The
The filing defines Adjusted EBITDA as a non-GAAP measure and says it should not be used in isolation as a substitute for net loss or operating cash flow; the quarter still reported a
8-K Event Classification
2 items: 7.01, 9.01
2 items
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Net Sales: $43.2 million
Q2 2026 Gross Margin: 28.5%
Q2 2026 Net Loss: $2.0 million
+5 more
8 metrics
Q2 2026 Net Sales
$43.2 million
Net sales for the three months ended June 30, 2026
Q2 2026 Gross Margin
28.5%
Gross profit margin for the three months ended June 30, 2026
Q2 2026 Net Loss
$2.0 million
GAAP net loss for the three months ended June 30, 2026
Q2 2026 Adjusted EBITDA
$0.3 million
Non-GAAP Adjusted EBITDA for the three months ended June 30, 2026
Cash and Marketable Securities
$41.0 million
Cash, cash equivalents, and marketable securities as of June 30, 2026
Proprietary Brand Penetration
39.7%
Proprietary brand sales as a percentage of Cultivation and Gardening net sales in Q2 2026
2026 Revenue Guidance
$162–$168 million
Full-year 2026 net revenue outlook reaffirmed by the company
2026 Adjusted EBITDA Guidance
$2–$3 million
Full-year 2026 Adjusted EBITDA outlook raised by the company
Key Terms
Adjusted EBITDA, proprietary brand sales, controlled environment agriculture, treasury stock, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA gain of $0.3 million compared to a loss of $1.3 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
proprietary brand sales financial
"Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 39.7%"
controlled environment agriculture technical
"suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation"
Controlled environment agriculture is the practice of growing fruits, vegetables or herbs inside purpose-built spaces—such as greenhouses or indoor farms—where light, temperature, humidity and water are tightly managed to produce consistent crops year-round. Investors watch it because it turns farming into a predictable, scalable operation (like a factory for plants), affecting yields, costs, supply reliability and price stability, and therefore the revenue and risk profile of businesses involved.
treasury stock financial
"Treasury stock, at cost; 724,927 and zero shares, respectively"
Treasury stock is shares that a company has bought back from the public and kept in its own control rather than retiring them. Think of it like a company holding its own tickets in a drawer: those shares no longer vote or receive dividends while held, but the company can reissue or retire them later; this reduces the number of shares available to outside investors and can boost per‑share earnings and influence ownership and stock price.
restructuring plan financial
"one-time severances outside of the restructuring plan announced July 2024"
A restructuring plan is a company’s roadmap for reorganizing its operations, debts, or assets to improve financial health and efficiency; think of it as rewriting a household budget and chores when income changes. Investors care because the plan can affect a company’s ability to repay loans, generate profits, and sustain growth—successful restructuring can restore value, while a poorly executed one can signal continued trouble or reduced returns.
Earnings Snapshot
Net sales: $43.2 million · Guidance included
quarter ended June 30, 2026
Net sales
$43.2 million
up 5.5% year-over-year from $41.0 million
Net loss
$2.0 million
improved by $2.8 million from a $4.8 million loss
Adjusted EBITDA
$0.3 million
improved by $1.6 million from a $1.3 million loss
Gross margin
28.5%
slightly higher than 28.3% in the prior-year quarter
Guidance
For 2026, the company reaffirmed net revenue guidance of $162–$168 million and increased Adjusted EBITDA guidance to $2–$3 million, expecting profitability to strengthen in the third and fourth quarters.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did GrowGeneration (GRWG) perform financially in Q2 2026?
GrowGeneration reported Q2 2026 net sales of $43.2 million, up 5.5% year-over-year, with gross margin of 28.5%. Net loss improved to $2.0 million from $4.8 million, and Adjusted EBITDA turned positive at $0.3 million, reflecting better mix and lower costs.
What guidance did GrowGeneration (GRWG) provide for full year 2026?
GrowGeneration reaffirmed 2026 net revenue guidance of $162–$168 million and raised Adjusted EBITDA guidance to $2–$3 million. Management expects profitability to build through the year, with profitable third and fourth quarters driven by seasonality and margin improvements.
How is GrowGeneration (GRWG) progressing with proprietary brand penetration?
In Q2 2026, proprietary brand sales reached 39.7% of Cultivation and Gardening net sales, up from 32.0% a year earlier. The company targets about 40% proprietary mix by year-end 2026, which supports higher gross margins and aligns with its commercial, brand-driven strategy.
What was GrowGeneration’s (GRWG) liquidity and balance sheet position at June 30, 2026?
As of June 30, 2026, GrowGeneration held $41.0 million in cash, cash equivalents, and marketable securities, with no debt. Current assets totaled $99.6 million versus current liabilities of $25.6 million, and total stockholders’ equity was $90.0 million.
How did GrowGeneration’s (GRWG) operating expenses change in Q2 2026?
Total operating expenses fell 13.1% to $14.7 million in Q2 2026 from $16.9 million. Store and other operating expenses declined about 21.9% to $6.1 million, reflecting retail footprint optimization and cost-reduction initiatives, while SG&A rose modestly to $6.5 million.
What sales growth did GrowGeneration (GRWG) expect for Q3 2026?
For the third quarter of 2026, GrowGeneration projected total consolidated net sales of $44–$46 million, indicating continued sequential growth from Q2’s $43.2 million. This outlook reflects anticipated seasonal strength and ongoing expansion of its commercial B2B platform.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 11, 2026
(Exact Name of Registrant as Specified in its Charter)
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code: (800 ) 935-8420
N/A
(Former Address of Principal Executive Offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
Section 7 – Regulation FD
Item 7.01. Regulation FD Disclosure
On August 11, 2026, GrowGeneration Corp. (the "Company") published a press release regarding its financial results for the second quarter of 2026 and updated guidance for the full year 2026.
A copy of the press release is attached hereto as Exhibit 99.1. The information contained in this Current Report on Form 8-K (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description | ||||
99.1 | Press release dated August 11, 2026 | ||||
104 | Cover Page Interactive Data File, formatted XBRL Document | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 11, 2026 | GrowGeneration Corp. | |||||||
By: | /s/ Darren Lampert | |||||||
Name: | Darren Lampert | |||||||
Title: | Chief Executive Officer | |||||||
GrowGeneration Reports Second Quarter 2026 Financial Results
Company Reaffirms 2026 Revenue Outlook and Raises Full Year Adjusted EBITDA(1) guidance to $2 million to $3 million
Net Loss Improved by $2.8 million Year-Over-Year; Achieved Positive Adjusted EBITDA(1) of $0.3 million
Net Sales of $43.2 million, up 12.6% Sequentially and 5.5% Year-Over-Year
Proprietary Brand Penetration Increased to 39.7% of Cultivation and Gardening Revenue, a 770 basis point improvement Year-Over-Year
$41.0 million in Cash, Cash Equivalents, and Marketable Securities with no Debt
DENVER, August 11, 2026 -- GrowGeneration Corp. (NASDAQ: GRWG) (“GrowGeneration,” “GrowGen,” or the “Company”), one of the nation’s largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and garden centers, today announced financial results for the second quarter of 2026.
Second Quarter 2026 Summary
•Net sales of $43.2 million, up 5.5% year-over-year;
•Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 39.7%, compared to 32.0% in the second quarter of 2025;
•Gross profit margin of 28.5%, compared to 28.3% for the second quarter of 2025;
•Store and other operating expenses declined approximately 21.9% to $6.1 million, compared to $7.9 million for the same period in the prior year;
•Total operating expenses decreased $2.2 million, or 13.1%, to $14.7 million in the second quarter of 2026, compared to $16.9 million for the same period in the prior year;
•Net loss was $2.0 million compared to a net loss of $4.8 million for the same period in 2025;
•Adjusted EBITDA(1) gain of $0.3 million compared to a loss of $1.3 million for the comparable prior year period; and
•Cash, cash equivalents, and marketable securities of $41.0 million and no debt.
Darren Lampert, GrowGen’s Co-Founder and Chief Executive Officer, commented, “GrowGeneration delivered a strong second quarter, representing our third consecutive quarter of year-over-year revenue growth driven by our commercial B2B business. Simultaneously, we expanded proprietary brand penetration to nearly 40% of Cultivation and Gardening revenue, while continuing to reduce costs and improve profitability. All of this contributed to GrowGen achieving positive Adjusted EBITDA for the second quarter. Our performance reflects the continued expansion of our commercial platform, the benefits of our streamlined cost structure, and disciplined execution against our strategic initiatives. As part of this strategy, we have also continued to maintain a strong balance sheet, ending the quarter with $41.0 million of cash, cash equivalents, and marketable securities and no debt. This financial strength also supported our stock repurchase activity during the quarter.”
“Moving forward, we are committed to executing our strategy and continuing our transformation into a commercial, proprietary-brand-driven business. We remain focused on driving continued revenue growth, while improving our revenue mix, expanding margins, and driving greater profitability as we continue to advance toward our year-end goal of proprietary brands representing 40% of Cultivation and Gardening sales. Based on our second quarter performance and our current expectations for the second half of the year, including anticipated tariff-related benefits, we are increasing our full-year Adjusted EBITDA outlook to $2 million to $3 million. These results represent another meaningful step forward in GrowGeneration's transformation and reinforce our confidence that the strategic actions we've taken are delivering meaningful operational improvements,” added Mr. Lampert.
Second Quarter 2026 Consolidated Results
Net sales were $43.2 million for the second quarter of 2026, compared to $41.0 million for the second quarter of 2025. This represents the third consecutive quarter of year-over-year revenue growth, led by our commercial B2B business. Cultivation and Gardening net sales were $34.9 million for the second quarter of 2026, compared to $32.9 million for the same period in the prior year. Net sales in our Storage Solutions segment were $8.3 million for the second quarter of 2026, compared to $8.1 million in the second quarter of 2025.
Once again, our quarterly proprietary brand sales exceeded our internal expectations, giving us additional confidence in our ability to expand gross margin for the long-term. Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 39.7%, compared to 32.0% for the same period in the prior year, mainly driven by our strategic initiatives to increase sales mix of our expanded portfolio of proprietary brands.
Gross profit was $12.3 million for the second quarter of 2026, compared to gross profit of $11.6 million for the second quarter of 2025. The year-over-year change was primarily a result of the increased sales volume of proprietary brand products and durable brand products within our Cultivation and Gardening segment in the second quarter of 2026. Gross profit margin was 28.5% for the second quarter of 2026, compared to 28.3% for the second quarter of 2025. The improvement was primarily driven by the increased mix of proprietary brand products within our Cultivation and Gardening segment, which generally have higher margins than non-proprietary brand products, partially offset by the increased sales mix of durable products, which generally have lower margins than consumable products.
Total operating expenses, which include store operations and other operational expenses, selling, general, and administrative, estimated credit losses, depreciation and amortization, and impairment expense decreased in the second quarter of 2026 by $2.2 million, or 13.1%, to $14.7 million, compared to $16.9 million in the second quarter of 2025.
Store and other operating expenses in the second quarter of 2026 declined by approximately 21.9% to $6.1 million, compared to $7.9 million in the second quarter of 2025, reflecting the benefits of reducing our retail footprint and our cost-reduction initiatives.
Selling, general, and administrative expenses in the second quarter of 2026 were $6.5 million, compared to $6.2 million in the second quarter of 2025, an increase of 5.0%.
GAAP net loss narrowed to $2.0 million in the second quarter of 2026, a $2.8 million improvement compared to a net loss of $4.8 million in the second quarter of 2025. The improvement was primarily driven by higher revenues, reduced operating expenses, and lower depreciation and amortization.
Non-GAAP Adjusted EBITDA(1) was a gain of $0.3 million in the second quarter of 2026, a $1.6 million year-over-year improvement compared to a loss of $1.3 million in the second quarter of 2025, reflecting gross margin benefit of higher proprietary brand penetration and the continued realization of operational cost-reduction initiatives.
Cash, cash equivalents, and marketable securities as of June 30, 2026 were $41.0 million. Inventory as of June 30, 2026 was $35.3 million, and prepaid and other current assets were $7.8 million.
Total current liabilities, including accounts payable, accrued payroll, and other liabilities, as of June 30, 2026 were $25.6 million.
Geographic Footprint
Our geographic footprint for our Cultivation and Gardening segment spans 492,000 square feet of retail and warehouse space and includes 19 retail locations across 9 states as of June 30, 2026. We closed four retail locations during the six months ended June 30, 2026 as part of our ongoing network optimization strategy. We continue to serve our customers through our other retail locations and our online platforms, such as growgeneration.com, where customers can make direct purchases and access our GrowGen Pro Program, which provides dedicated services and solutions for multi-state operators, controlled environment agriculture and greenhouse customers, wholesale partners, and independent commercial cultivators.
2026 Outlook
For the full year 2026, the Company reaffirmed that it expects net revenue in the range of $162 million to $168 million. The Company expects proprietary brand sales as a percentage of Cultivation & Gardening revenue to reach approximately 40% by
year-end. The Company expects full year improvement in gross margin and operating expense efficiency during 2026. With this and the improvements made in its inventory base, the Company anticipates gross margins for the full year 2026 to be in the range of 27% to 29%. Based on these improvements, GrowGen expects to deliver Adjusted EBITDA in the range of $2 million to $3 million for the full year 2026.
The Company’s full year 2026 guidance assumes profitability will build progressively throughout the year, with profitable third and fourth quarters reflecting the outdoor cultivation and gardening season as well as continued improvements in gross margin and a lower operating expense base compared to 2025.
For the third quarter of 2026, the Company expects total consolidated net sales in the range of $44 million to $46 million, representing continued sequential growth.
Footnotes
(1) Adjusted EBITDA represents earnings before interest, taxes, depreciation, and amortization as adjusted for certain items as set forth in the reconciliation table of U.S. GAAP to non-GAAP information and is a measure calculated and presented on the basis of methodologies other than in accordance with GAAP. Please refer to the Use of Non-GAAP Financial Information herein for further discussion and reconciliation of this measure to GAAP measures.
Conference Call
The Company will host a conference call today, August 11, 2026, at 4:30 p.m. Eastern Time to discuss financial results for the second quarter ended June 30, 2026. To participate in the call, please dial 1-(888)-699-1199 (domestic) or 1-(416)-945-7677 (international). The conference code is 76956. The call will also be webcast and can be accessed at
https://app.webinar.net/Yp8aeqaewRr or on the Investor Relations section of the GrowGen website at: https://ir.growgeneration.com. A replay of the webcast will be available approximately two hours after the conclusion of the call and remain available for approximately 90 calendar days.
About GrowGeneration Corp:
GrowGen is one of the nation’s largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and garden centers. GrowGen carries and sells thousands of products, such as nutrients, additives, growing media, lighting, environmental control systems, and benching and racking, including proprietary brands such as Char Coir, Drip Hydro, Power Si, Ion lights, The Harvest Company, and more. The Company also operates an online superstore for cultivators at growgeneration.com, as well as a wholesale business for resellers, and a benching, racking, and storage solutions business, MMI Storage Solutions.
To be added to the GrowGeneration email distribution list, please email GrowGen@kcsa.com with GRWG in the subject line.
Forward Looking Statements
This press release contains predictions, estimates or other information that are considered forward-looking statements, including without limitation, statements regarding the Company’s financial outlook, guidance, and strategic expectations, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used herein, words such as “look forward,” “expect,” “believe,” “anticipate,” “estimate,” “guidance,” “outlook,” “projected,” “intend,” “may,” or variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements represent management’s current expectations and are based on assumptions and estimates that management believes are reasonable as of the date of this press release. You are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those anticipated due to a number of risks and uncertainties, including but not limited to those discussed in filings made with the United States Securities and Exchange Commission, available at: www.sec.gov, and on the Company’s website, at: www.growgeneration.com. The Company does not undertake any obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by applicable securities laws, whether as a result of new information, future events, or otherwise.
Contact:
KCSA Strategic Communications
Philip Carlson
Managing Director
T: 212-896-1233
E: GrowGen@kcsa.com
GROWGENERATION CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share amounts)
| June 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 23,460 | $ | 30,406 | |||||||
| Marketable securities | 17,553 | 15,658 | |||||||||
Accounts receivable, net of allowance for credit losses of $2,363 and $2,109, respectively | 15,264 | 10,668 | |||||||||
Notes receivable, current, net of allowance for credit losses of $201 and $214, respectively | 283 | 507 | |||||||||
| Inventory | 35,295 | 38,776 | |||||||||
| Prepaid and other current assets | 7,750 | 7,732 | |||||||||
| Total current assets | 99,605 | 103,747 | |||||||||
| Property and equipment, net | 6,423 | 9,795 | |||||||||
| Property and equipment held for sale | 1,574 | — | |||||||||
| Operating leases right-of-use assets, net | 23,880 | 27,050 | |||||||||
| Intangible assets, net | 2,012 | 3,326 | |||||||||
| Goodwill | 2,080 | 2,080 | |||||||||
| Other assets | 1,067 | 1,042 | |||||||||
| TOTAL ASSETS | $ | 136,641 | $ | 147,040 | |||||||
| LIABILITIES & STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 10,761 | $ | 8,775 | |||||||
| Accrued liabilities | 3,934 | 3,269 | |||||||||
| Payroll and payroll tax liabilities | 2,204 | 2,589 | |||||||||
| Customer deposits | 2,260 | 4,015 | |||||||||
| Sales tax payable | 884 | 872 | |||||||||
| Current maturities of operating lease liabilities | 5,568 | 6,455 | |||||||||
| Total current liabilities | 25,611 | 25,975 | |||||||||
| Operating lease liabilities, net of current maturities | 20,499 | 23,022 | |||||||||
| Other long-term liabilities | 503 | 544 | |||||||||
| Total liabilities | 46,613 | 49,541 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity: | |||||||||||
Common stock; $0.001 par value; 100,000,000 shares authorized, 60,283,226 and 60,090,905 shares issued, 59,558,299 and 60,090,905 shares outstanding, respectively | 60 | 60 | |||||||||
Treasury stock, at cost; 724,927 and zero shares, respectively | (1,010) | — | |||||||||
| Additional paid-in capital | 377,602 | 377,128 | |||||||||
| Accumulated deficit | (286,624) | (279,689) | |||||||||
| Total stockholders' equity | 90,028 | 97,499 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 136,641 | $ | 147,040 | |||||||
GROWGENERATION CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share and per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | 43,215 | $ | 40,963 | $ | 81,606 | $ | 76,666 | |||||||||||||||
| Cost of sales (exclusive of depreciation and amortization shown below) | 30,895 | 29,369 | 59,546 | 55,365 | |||||||||||||||||||
| Gross profit | 12,320 | 11,594 | 22,060 | 21,301 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Store operations and other operational expenses | 6,143 | 7,867 | 12,544 | 16,659 | |||||||||||||||||||
| Selling, general, and administrative | 6,458 | 6,151 | 13,384 | 13,263 | |||||||||||||||||||
| Estimated credit losses | 336 | 163 | 403 | 255 | |||||||||||||||||||
| Depreciation and amortization | 1,504 | 2,687 | 3,115 | 6,272 | |||||||||||||||||||
| Impairment loss | 220 | — | 220 | — | |||||||||||||||||||
| Total operating expenses | 14,661 | 16,868 | 29,666 | 36,449 | |||||||||||||||||||
| Loss from operations | (2,341) | (5,274) | (7,606) | (15,148) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 347 | 463 | 671 | 960 | |||||||||||||||||||
| Total other income | 347 | 463 | 671 | 960 | |||||||||||||||||||
| Net loss before income taxes | (1,994) | (4,811) | (6,935) | (14,188) | |||||||||||||||||||
| Provision for income taxes | (19) | — | — | — | |||||||||||||||||||
| Net loss | $ | (2,013) | $ | (4,811) | $ | (6,935) | $ | (14,188) | |||||||||||||||
| Net loss per share, basic | $ | (0.03) | $ | (0.08) | $ | (0.12) | $ | (0.24) | |||||||||||||||
| Net loss per share, diluted | $ | (0.03) | $ | (0.08) | $ | (0.12) | $ | (0.24) | |||||||||||||||
| Weighted average shares outstanding, basic | 59,805,494 | 59,551,783 | 59,947,411 | 59,496,861 | |||||||||||||||||||
| Weighted average shares outstanding, diluted | 59,805,494 | 59,551,783 | 59,947,411 | 59,496,861 | |||||||||||||||||||
Use of Non-GAAP Financial Information
The following non-GAAP financial measures of EBITDA and Adjusted EBITDA are not in accordance with, or an alternative for, generally accepted accounting principles ("GAAP") and should be considered in addition to, and not as a substitute for, the most directly comparable GAAP financial measures. We believe these non-GAAP financial measures, when used in conjunction with their most directly comparable GAAP financial measures, net income (loss), provide meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods, identify trends affecting our business, and project future performance. Management uses these non-GAAP financial measures for internal planning and reporting purposes, and we believe that these non-GAAP financial measures may be useful to investors in their assessment of our operating performance, our ability to generate cash, and valuation. In addition, these non-GAAP financial measures address questions routinely received from analysts and investors and, in order to ensure that all investors have access to the same data, we have determined that it is appropriate to make this data available to all investors. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA are non-GAAP financial measures commonly used in our industry and should not be construed in isolation as substitutions to net income (loss) as indicators of operating performance or as alternatives to cash flow provided by operating activities as a measure of liquidity (each as determined in accordance with GAAP). GrowGeneration defines EBITDA as net income (loss) before interest income, interest expense, income tax expense, depreciation and amortization, and Adjusted EBITDA as further adjusted to exclude certain items such as stock-based compensation, impairment losses, restructuring and corporate rationalization costs, and other non-core or non-recurring expenses and to include income from our marketable securities as these investments are part of our operational business strategy and increase the cash available to us.
Set forth below is a reconciliation of EBITDA and Adjusted EBITDA to net loss (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net loss | $ | (2,013) | $ | (4,811) | $ | (6,935) | $ | (14,188) | |||||||||||||||
| Provision for income taxes | 19 | — | — | — | |||||||||||||||||||
| Interest income | (347) | (463) | (671) | (960) | |||||||||||||||||||
| Depreciation and amortization | 1,504 | 2,687 | 3,115 | 6,272 | |||||||||||||||||||
| EBITDA | $ | (837) | $ | (2,587) | $ | (4,491) | $ | (8,876) | |||||||||||||||
| Share-based compensation | 270 | 315 | 525 | 818 | |||||||||||||||||||
| Investment income | 293 | 453 | 593 | 972 | |||||||||||||||||||
| Acquisition transaction costs | — | 50 | — | 50 | |||||||||||||||||||
| Impairment loss | 220 | — | 220 | — | |||||||||||||||||||
Restructuring plan | — | — | — | 1,141 | |||||||||||||||||||
Consolidation and other charges (1) | 309 | 467 | 1,824 | 563 | |||||||||||||||||||
| Adjusted EBITDA | $ | 255 | $ | (1,302) | $ | (1,329) | $ | (5,332) | |||||||||||||||
(1) Consists primarily of expenditures related to legal settlements and contingencies, the activity of store and distribution consolidation, one-time severances outside of the restructuring plan announced July 2024, and other non-core or non-recurring expenses | |||||||||||||||||||||||